PREDICTIONS

Congress Will Do Nothing With Net Neutrality

August 10, 2017

A scheduled U.S. House committee in 9/17 even had to be canceled because no firms would commit publicly to being there.

$2B AOI Cap Worse Than Old $3B Acacia

July 29, 2017

AOI's valuation declined substantially five days later.

Perils of Over-Exuberance

July 20, 2017

Despite ADVA reporting its "revenue outlook for the remainder of the fiscal year is subdued," we were critical of its rather rosy outlook on the optical space. A little over a month later, the supplier pre-announced weakness for that quarter.

Lumentum and the Problem with Hubris

June 26, 2017

On its next quarterly conference call, Lumentum decided to cease being so specific on "how much money it expects to make on componentry for the iPhone," which had to be angering Apple.

Infinera Apparently Won’t Neutralize XTM

May 28, 2017

Our assumption proved accurate with an announcement of the XTM II by Infinera the following month.

Embarrassing State of Market Research on Display at OFC 2017

March 21, 2017

During the summer of '17, it became abundantly certain that such bullish forecasts were way off the mark. There is never a loss of credibility for the vast majority of market research analysts because they are viewed as extensions of the PR departments of the manufacturers.

Optical “Supercycle” Farce

December 18, 2016

"With the exception of Chinese system vendors, the booming business mainly applies to component companies supplying them." By 9/17, it became totally clear that short-term, pent-up demand in China alone created the idea of a supercycle, and that there were not multiple market drivers.

Acacia’s Bridge Too Far

October 30, 2016

Regarding, "we would not be surprised to see Ciena introduce WaveLogic 4 soon," the vendor launched WaveLogic Ai the next day, its fourth-generation DSP.

All-Optical Switches: Still Illusory?

October 26, 2016

Despite optimism by the two dominant vendors in penetrating the data center market, we gave several reasons against such adoption, as well as discussed the historic lack of traction in general. Later, Calient, which had been around for quite a while, in what appeared to be a desperate move, secured only $1.3M in venture funding, and then was apparently forced to give up a controlling interest in the firm in order to survive.

Google Fiber Fizzles as Predicted

August 16, 2016

Since 2010, Mark has been on the record as stating that all of Google's investments not connected with its core competency are not usually ends in themselves, but to encourage more broadband development by other operators and to increase Internet usage, so that the company can sell more ads.

Acacia’s Valuation: The Street’s Cruel Joke

August 14, 2016

"At a minimum, the negative consequences...will result in dramatically skewing the value assessments of...other players in the space.” In early 9/16, a prominent investment firm downgraded Ciena based on “valuation” despite no justification for its market cap being about $1B lower than Acacia.

Brexit: Political Upside Imperative

June 30, 2016

"The critique in general of Brexit makes it falsely appear that the UK is in a permanently weakened position." In 7/17 there was a report of "record levels of venture capital...investment in [London's] tech sector."

AT&T's “Open ROADM”: More Skepticism

April 05, 2016

The use of open line systems have remained predominantly in data center networks.

SDN Crack-Up?

February 23, 2016

In public networks, SDN continues to be deployed mainly in greenfield applications, specifically in the access portion.

Ciena’s New Obsession with Vertical Integration

February 17, 2016

"A potential problem could be that the top leadership at the transmission equipment giant may be too lax about protecting its proprietary advantage with its WaveLogic 3 device in favor of short-term concerns regarding keeping Wall Street investors happy." Foreshadowing of the later deal it made on WaveLogic Ai with three component vendors.

Nokia/AlcaLu Optical: Mixed Bag at Best

January 13, 2016

Nokia's optical sales have remained strong on submarine applications, but there has also not been a change in the relatively slow growth for dry networks.

Infinera’s PIC Challenge

January 06, 2016

"While the necessity for 64QAM is terribly far out into the future, we think it is possible that a plateau has been hit with Infinera not being able to go beyond 8QAM and 16QAM with Indium Phosphide-based componentry to achieve a single 400G channel or a 1-terabit PIC….” Even when Infinera announced its substantially higher capacity 2.4 terabit PIC in March, 2016, it specified 16QAM.

Reactions to Ciena Based on Elusive Credibility Factor?

December 22, 2015

“In the earnings transcript, Ciena provided a rundown on the DCI vendors. ADVA Optical Networking should have probably been included as one of the 'key players.'" ADVA’s percentage of its sales in DCI about doubled the following year.

Xtera IPO an Act of Desperation?

November 30, 2015

Although we understand that there was a high level of optimism at Xtera in raising funds publicly, it had insufficient appreciation of the higher level of scrutiny involved in opening up its accounts to the world, and we sincerely believe that it could have survived indefinitely without declaring bankruptcy, if it remained a private entity.

Infinera Needs Dose of Humility Such as With Metro

November 28, 2015

"The only reasonable interpretation appears to be that Infinera-developed products like the XTC-2/2-E are more than sufficient to support an optimized switched metro 100G network versus the offerings from the Swedish supplier." In 8/17, the Infinera leadership finally admitted that it dropped the ball with the TM series.

Verizon’s Potential Colossal Blunder

November 11, 2015

In not selling its enterprise business, as the newswire report indicated there were considerations otherwise, Verizon 5G wireless offerings would be bolstered as well.

More 400G Insanity at ECOC

October 17, 2015

"There can be no doubt that in the foreseeable future that there will be an extremely small number of ports at that data rate found on routers, and perhaps even in data centers, and many analysts and reporters in the market can be counted on to disingenuously declare that the market for that speed has really arrived." Fast-forwarding to the OIDA Executive Forum 2017, "we recall the executive from Finisar, which is the most datacom-centric of all the large optical component vendors, tempering over-enthusiasm about the outlook for demand for 400G based on the very small number of potential data center buyers."

Avago’s Spinoff of Optics in Short Term?

August 29, 2015

“As a bare minimum, the vendor would most likely be interested in ridding itself of many of its own devices under its current heading, 'fiber optics,' within its present category of 'wired infrastructure.' The next month fibeReality was the first news source in the world to point out that a very vague press release put out by Foxconn in Chinese on purchasing machinery really meant that it had bought Avago’s optical module business.

Ciena’s Last Chance to Fulfill Its Destiny

August 23, 2015

“Nokia’s purchase of Alcatel-Lucent means that Ciena’s position particularly in the US market has been strengthened (at least one big carrier in the States wants as little to do with Nokia as possible)….” In a 10/15 Light Reading post, “We think Verizon intends to abandon Alcatel-Lucent as a second source for its long-haul network and focus future investments toward sole-sourced Ciena,” states the analyst (Simon Leopold from Raymond James Financial) in a research note….”

Where Would NYC be on Fiber to the Home Without Verizon?

June 29, 2015

"As alluded to in our previous blog articles, Verizon took advantage of the change in FCC policy, which did not require unbundling, and concentrated its FiOS activity along the I-95 corridor from Boston to Richmond, making sure to pass all of the big enterprise customers, which would provide much higher margins than the residential space." In 7/17, Verizon probably made its first admission of the plan by stating its “objective was to concentrate landline operations in contiguous northeast markets to enhance operational efficiency..."

Verizon/AOL: Bypassing Title II with New Internal Infrastructure?

May 31, 2015

"We at fibeReality believe that the fundamental unfairness of an Internet service provider being treated as a utility is at the heart of the AOL acquisition and we find the various other explanations that have been given in the market to be unpersuasive." In 9/16, we extended the same rationale to Verizon's interest in Yahoo, and found somebody else who was thinking along the same lines. Later, it became evident that Verizon's so-called strategy in moving forward did not make much sense, further substantiating our original thesis. 

Ciena Probably Overpaying for Cyan

May 30, 2015

In 12/16, Ciena said revenues for Blue Planet could be as low as $50M annually in two years.

400GbE Spectacular Fantasy

April 27, 2015

“As more time goes by, we hope there will be a greater sense of inevitability to developing a standard that would have a greater level of rationality – like 200GbE – in terms of getting to a data rate that would be closer in terms of the timing of available technology to construct something that at least has the appearance of being authentic.” A study group for 200GbE was established by the IEEE soon afterward.

Bullish on 850nm VCSELs; Avago Selling VCSEL Components

March 16, 2015

"The most shocking change is based on recent evidence that Avago Technologies is selling VCSEL components, possibly including as far down the food chain as bare die...." In its future deal with Foxconn, our understanding was that the former paid the latter by selling chips, including VCSEL devices, at a premium.

New Title II Will Choke Optical Investment

February 15, 2015

“The logical presumption associated with the madness of the FCC’s planned takeover of the Internet will be that service providers should be expected to cut back on fiber optic network investment to an absolute minimum, at least until litigation in the courts has been completed.” According to Dr. Hal Singer, the data demonstrated a substantial decrease in CAPEX.

OpSIS’ Demise: Politically Incorrect Si Photonic Wafers

October 09, 2014

In October, 2014, we wrote several articles about the coming “Integrated Photonics Manufacturing Institute,” which was later called the “American Institute for Manufacturing Integrated Photonics (AIM Photonics) “[L]ook for stipulations…that might include exorbitant entry fees and “[there is the] logical assumption that corporations will be reluctant to…share proprietary technology.” By February, 2016, a lot of grumbling could be heard about AIM. One company that wanted to join the consortium was asked to contribute $1 million, along with its packaging IP, and then it was supposed to teach AIM how to practice its IP, so it could be used for the benefit of its other members. Of course, the firm did not sign up.

Silicon Photonics: Widespread Usage on Active Components Doubtful

September 23, 2014

For a while, criticism of silicon photonics soon became mainstream.